I can see both sides. I think what you're doing is fantastic - it works for you (it hasn't worked for me BTW, I just think some kids are good at not touching and some aren't and mine most definitely isn't).

However, I think MIL was just doing what grandmas do. DD wanted to play with something - instead of saying no, MIL thought 'oh we'll be careful, why not.' She probably just didn't want DD to be upset at a no. That's what grandparents do - they indulge their grandkids and they're not always completely sensible. So I'd cut her a bit of slack.

If I was in her shoes, I'd be nervous too because at the end of the day, I'm in someone else's house with breakable stuff and I have cute, adorable DD to look after who wants to play with the breakable stuff and I don't know how to say no.

So I think I'd give MIL a couple of options - tell her that you're fine with her telling DD no or if she feels nervous about potential tantrums/breakages, then offer to put them out of the way the next time she's over.

No-one's being silly here, everyone's just finding their way. Bound to be a couple of hurdles along the way but it sounds like things are generally going great!